Plus, the bank pushed back the date at which it expects the Canadian economy to close its output gap — to the end of next year from mid-2011. Still, it opted for a rate hike as the “underlying dynamics” for inflation are little changed, with both headline and core inflation expected to remain near the bank’s preferred 2% target up until the end of 2012.

The central bank’s benchmark rate now stands at 0.75%, an increase of 25 basis points, and marks the second straight rate hike. The Bank of Canada remains the only central bank among its Group of Seven peers to raise rates following the recession.

Read the  Announcement.

What is Assignment?
A common question raised during the pre-construction process is assignments. For those who are not familiar with assignments, it is simply a sales contract entered into by two parties at an earlier date. It is essentially a transfer of the right to purchase that property from the original purchaser to a new purchaser prior to the unit closing. Assignments of sale are very common during the construction stage of new developments by allowing the original purchaser to resell their unit before the sale is completed for the property. Since units in pre-construction are purchased sometimes 3-4 years prior to occupancy, sellers often choose to assign their units before they occupy as their lives may take on a different path. On the flip side, a lot of purchasers may look for assignments to buy before the building is complete. Once construction has started, there are always many assignment agreements floating around as occupancy dates become more accurate. There are however many stipulations that are involved when selling or buying an assignment.

They are as follows:

Selling an Assignment
The first step that should be taken when considering assigning your condo is whether you are indeed allowed to assign your contract. In most cases the developers will have certain rules that must be followed. For example, some new developments in Toronto stipulated that at $2,500-$5,000 administration fee must be paid, 80% of the building must be sold out, the floor plan that you have purchased must be sold out, it cannot be advertised on MLS, and the builder must give permission for assignments to take place. Once all the criteria have been met, it is recommended that you speak to your lawyer to assist you with assigning your condo.

Buying an Assignment
The first step that should be considered when purchasing an Assignment Agreement is that the assignor is indeed allowed to assign his condo. There can be serious ramifications from the builder if units are assigned without the builder’s permission. The process of purchasing an assignment is quite different than your standard real estate transaction as you are purchasing a contract from the original owner of that contract and assuming all of their rights and obligations. Here is an example of how an Assignment works:

Original Purchase Price: $400,000 put down 15% deposit

New Purchase Price: $460,000

*Difference: $60,000 + $60000 (15% deposit) = $120,000 – This amount is paid to the original purchaser of the Agreement of Purchase and Sale

Once the assignment fee is paid to the original purchaser, the new owner is obligated to pay the original purchase price of the property as per the terms of the original Agreement of Purchase and Sale to the developer.

When dealing with assignments, it is extremely important for both the assignor and assignee to seek legal advice as these transactions can sometimes become very challenging. When handled correctly, assignment can have a mutual benefit to both parties involved.

Canada is among just a few places on earth where many different cultures are blending as never before, with almost no violence to show for it. This collective personality and cultures is unique.  We live in a multi-cultural, multi-lingual, and multi-opportunity country with endless opportunities for growth, and success.

Happy Canada Day!

Beginning July 1, 2010, there will be sales tax in Ontario of 5% + 8% = 13% (12% in British Columbia) replacing the former 5% GST (Goods and Services Tax) and the  former 8% PST (Provincial Sales Tax).

1) HST and  Mortgage Brokerage Fees (to arrange a mortgage, if one uses a Mortgage Broker)HST will not apply since mortgage brokerage services are exempt as part of the financial services industry.

2) HST on Real Estate Commissions

Generally, HST will be payable on commissions for any real estate sale closed after July 1, 2010.  However, the
general transitional rule (for sale contracts entered into before July 1, 2010), is if at least 90% of the services
were performed prior to July 1, 2010, only 5% GST is payable (no PST).  If an offer to purchase real estate was
accepted prior to July 1, 2010, then the realtor services were performed prior to July 1, 2010, and only 5% GST
should be payable even though the realtor’s commission is not due for payment until the sale has closed after July
1, 2010. Warning to sellers: If, prior to July 1, 2010, a seller is about to accept an offer to purchase (which will
close after July 1, 2010), the seller should clarify in writing with the realtor that only GST will be payable on commissions due on a sale closing after July 1, 2010.

3) HST and Rents Paid by Tenants

For residential tenancies, HST will not apply to such rents.  For commercial tenancies (industrial, office or retail), HSTwill be charged on rents paid after July 1, 2010 (but most commercial tenants qualify to recover such HST payments through input tax credits).

4) HST and Condominium Monthly Maintenance Fees

For residential condominiums, HST will not apply on monthly common expenses,  but HST is payable for
commercial (retail), office, industrial) condo common expenses paid on or after July 1, 2010 (most commercial
condo owners  qualify to recover such HST payments through input tax credits).

5) HST on HOME RENOVATIONS

For any part of services (labour and materials) provided after July 1, 2010 (no matter when a contract for
renovations of a residence was signed), the part performed or provided after July 1, 2010, will be subject to HST.

6) HST and RESALE COTTAGE / VACATION PROPERTY PURCHASES

HST will not be payable on the price if the property sold by the seller and bought by the buyer is personal use
property.  However, if the seller had been renting out the property more than 50% of the time during the seller’s
ownership, the price will likely be subject to HST.  If the  property being sold was part of a rental pool, HST will
apply.  Consult your tax accountant.

7) HST and RESALE RESIDENTIAL PROPERTY PURCHASES

There will be no HST on the price of resale residential purchases.  Note: Resale residential purchases will
therefore become a much more attractive investment (rather than buying from a builder) particularly when one
considers that builder prices will result in 13% HST (whether built into the price or being structured in addition to the price by some builders in Ontario).  Builder prices also must include higher increased current costs of labour, materials and land costs as well as substantial municipal levies and educational levies plus sizable closing adjustments (often being hidden by builders in the fine print of many pages in a builder’s agreement), all of which are not payable by a buyer / investor who purchases resale residential property. (Think about it!)

8) HST on a PURCHASE OF A SUBSTANTIALLY RENOVATED HOME

If a residence being purchased has been “substantially renovated”, it will be treated in the same manner as buying new construction from a builder and HST will generally apply to the price paid.  See Canada Revenue Agency (CRA) Bulletin B-092 which states that a “substantial renovation”, in  effect, refers to a renovation where at least 90% of the interior of a building (excluding the foundation, external walls, internal supporting walls, roof, floors and staircases) has been
removed or replaced.

9) HST and PURCHASE of RESALE APARTMENT BUILDINGS (Multi-Unit Residential)

No HST will be payable on the price of a resale apartment building (multi-unit residential).  If part of such a building is commercial, the purchase price must be reasonably apportioned between the part of the building that is residential resale (HST exempt) and the other part of the building that has a commercial component, which part will be subject to HST.

10) HST on PURCHASE OF COMMERCIAL PROPERTIES (new or resale commercial properties closing after July 1, 2010 no matter when an offer was signed)

HST will apply to the purchase price; however, typically, buyers who obtain a GST registration prior to closing
(must be registered for GST in the same manner as ownership will be taken) will not need to pay the HST on
closing provided:

(a) a GST registration is obtained prior to the closing date, and

(b) the buyer signs an appropriate undertaking in thelawyer’s office to become self-assessed.

Note: Watch out for the purchase of office condominiums, industrial condominiums, and retail condominiums, the price for which will be subject to HST (being subject to only GST on the price for closings prior to July 1, 2010).

11) HST and the PURCHASE OF VACANT LAND

(a) FarmlandHST will typically apply to the price of such land if farm land is sold alone; however, if the land is sold as part ofa farming business, it can be treated differently.  Consult your tax accountant.

(b) Building Lot
HST will typically apply to the price when the seller is involved in a commercial real estate activity; however,
some lot sale prices might be exempt from HST if the seller is not engaged in a real estate commercial activity.

(c) Personal Use Of Vacant Land
No HST is payable if an individual sells personal use vacant land (which would have been exempt from GST).

12) HST on PURCHASES OF NEWLY CONSTRUCTED RESIDENTIAL PROPERTY

(a) Builder’s Agreement Prior to June 19, 2009
No HST is payable if an offer to purchase from a builder was accepted prior to June 19, 2009 (only GST willapply; however, most builders include GST inside the sale price).  Note: Buying by way of an assignment (where the builder sale agreement was signed prior to June 19, 2009) becomes attractive!

(b) Builder’s Agreement Accepted after June 18, 2009
If an offer to purchase from a builder was accepted after June 18, 2009 and either occupancy closing (for a new
condo purchase) or final closing occurs prior to July 1, 2010, HST is not payable;  HST  is payable  if both
occupancy (in a new condo purchase) and final closing occur after July 1, 2010.

(c) If Builder’s Agreement Silent about HST
If an offer to purchase from a builder was accepted after June 18, 2009 and failed to make reference to HST, the
sale price includes Ontario’s 8% PST component of the HST if it is payable (which means that the builder must
pay the PST and cannot charge it to the buyer).

(d) GST Rebate (calculated on the 5% GST part of the 13% HST)
Typically, most builders include the GST component of HST (being 5%) in the sale price based on the government
GST rebate being assigned from the buyer to the builder (such GST rebate being 36% of the GST payable on the
first $350,000.00 which is reduced to NIL as the price  increases from $350,000.00 to $450,000.00, there being
no GST rebate after $450,000.00).

Note: In order for the GST rebate to be assigned to the builder by the buyer, the buyer must qualify by the buyer
or an immediate family member living in the unit.  If not qualifying (such as an investor who will be renting out the
unit), the rebate cannot be assigned to the builder and the builder will charge the cost of such unassignable rebate to the buyer on closing in addition to the purchase price, which results in the buyer being forced to make a separate
application to the federal government to recover such rebate.  To qualify for recovery of such rebate, the investor
must own the unit for at least one year and reasonably expect to rent the unit to the initial tenant for one year.
An investor need not wait the year to apply for and obtain the rebate but if the government later discovers that
ownership was less than one year, the government might seek to recover the rebate paid to the investor.

(e) PST Rebate (calculated on the 8% PST Component of the 13% HST)
Warning: All builder agreements should be reviewed by a lawyer either before a buyer signs an offer or during
any available cooling off period since some builder agreements require buyers to pay the 8% PST (or the
Net PST) component of the HST in addition to the purchase price.

Regarding a PST rebate, only 75% of the 8% PST component of the HST is refundable to a buyer on
the part of the purchase price that is up to $400,000.00 (being newly constructed from a builder since there is
no HST on resale residential property).  There is no government rebate on the 8% PST for the part of
any price that exceeds $400,000.00!  This means that 75% of 8% (being 6%) is refundable by the government
and 25% of 8% (being 2%) is not on the first $400,000.00 of price.

Example: If the price from a builder is $500,000.00, the gross 8% PST component of the HST would be $40,000.00, but since the government offers a rebate of 75% of the 8% PST on the first $400,000.00, this
will effectively (for a qualifying buyer whose immediate family member will be living in the unit) reduce the PST
to 2% on the first $400,000.00 to $8,000.00.  Since there is no PST rebate for that part of the price over
$400,000.00, 8% is charged on the next $100,000.00 being a further $8,000.00 which means (for a qualified
buyer who can assign the rebate to the builder) that the total net PST payable is $16,000.00.  If the net PST is
not included in the price of $500,000.00, the price plus net PST payable becomes $516,000.00.  The gross 8%
PST on $500,000.00 is $40.000.00 but (due to the rebate of $24,000.00 on the first $400,000.00) the net
PST payable is $16,000.00.

Note: If the builder’s agreement requires the Net PST to be paid by the buyer, the buyer pays $16,000.00 on top
of the price.  If the builder’s agreement states that the NetPST is included in the price (as GST is typically with most

builders), the price remains $500,000.00.  Watch out!Caution: An investor-buyer who will rent out the unit will
not qualify for assignment of PST rebate to the builder and, therefore, on closing, must pay the purchase price
of $500,000.00 plus the gross PST of $40,000.00 (being a total of $540,000.00) and then, after closing
apply to the government for the rebate of $24,000.00 to be received if the investor qualifies (must be owning
for one year and rent to a tenant who is reasonably expected to live in the unit for one year, although the
rebate application can be made as soon as the purchase from the builder is closed).

(f) Qualifying  for a Rebate (GST or PST) whenBuying from a Builder
In order to qualify for GST or PST rebates, the property purchased from a builder must be intended to be a
primary place of residence, which means that if a person has more than one residence in the world, (in order to
qualify for the rebate) the unit must be the main place of residence and not a secondary residence.

Also, the residence purchased must be used as a primary place of residence (as stated above) by the buyer or a
relation of the buyer.  Relation of the buyer includes an individual who is related by blood, marriage, adoption or
common law (including a former spouse or a former common law partner).  Blood relation is limited to parents,
siblings, children, grandchildren but does not include cousins, uncles or aunts.

(g) Additional Transitional PST rebate for NON-CONDOMINIUM Builder Purchase (where
part of construction was done as of July 1, 2010)
If HST is payable on a newly constructed home (not a condominium) and if construction of the residence was at least 10% complete as of July 1, 2010, a transitionalPST rebate of up to 2% of the sale price can be claimed on the PST component of the HST as follows:

% Completed As Of July 1, 2010     Portion Of 2% Of Price To Be Refunded
10% – 24%     25%
25% – 49%     50%
50% – 74%     75%
75% – 89%     90%
90% – 100%     100%

Example: If buying a freehold townhouse, a semi-detached or a detached from a builder for $500,000.00 where
construction was 95% complete on July 1, 2010 and closing occurs on July 15, 2010, PST rebate for qualified
buyer will be:

(i) 75% of 8% on the first $400,000.00 =  $24,000.00
(ii) 100% of 2% on $500,000.00  =  $10,000.00
Total rebates      $34,000.00

Instead of paying a gross PST of 8% on $500,000.00 being $40,000.00, the rebates of $34,000.00 would
reduce the net PST payable to $6,000.00.  The question is whether such Net PST is included or not included in the
purchase price from the builder according to the terms of the builder’s agreement!

Note: The PST transitional rebate of up to 2% of the purchase price can only be obtained if:

(i) HST is payable on the price where the builder’s agreement was accepted after June 18, 2009 andcloses after July 1, 2010;(ii) the purchase is for new residential construction which is not a condominium;

(iii) construction is at least 10% complete as of July 1, 2010;

(iv) a certificate is obtained on closing from the builder stating the percentage of completion of construction as
of July 1, 2010.  Note: the builder is not required to provide this to a buyer unless the terms of the purchase agreement with the builder requires such a certificate to be provided; and

(v) an application for a transitional PST rebate is filed with the government by July 1, 2014.

(h) CONTACT  TELEPHONE NUMBERS FOR HST TRANSITIONAL RULES
Ontario has proposed transitional rules that assist businesses in the transition to a Harmonized Sales Tax (HST).  Formore information on the transitional rules for the HST, please call Canada Revenue Agency (CRA):

I received this great article from Stephen H. Shub, Barrister &  Solicitor,  1 (800) 959-5525.

Today’s home builders offer a wide variety of energy efficient options. These range from certified Built Green or R2000 finished homes, to individual features such as high efficiency heating systems, upgraded insulation and ENERGY STAR appliances.

Whether you’re building or buying a new home, ask your builder about the following energy efficiency features: High Efficiency Heating Systems; Air Sealing; Upgraded Insulation; High-Performance Windows; Energy Efficient Appliances and Lighting; Water Conserving Toilets, Faucets and Showerheads; and High Efficiency Water Heaters.

An energy efficient home is healthier and more comfortable. Using the features above will reduce your energy costs by up to $1,000 per year, provide a higher resale value and reduce your greenhouse gas emissions by five to seven tonnes per year.

What is HST?
The Harmonized Sales Tax (HST) is the harmonized value-added tax that will replace GST AND PST on July 1, 2010.  The HST will apply at a rate of 13% in Ontario to taxable property and services.

Will HST apply to the same things as the GST?
In general, property and services that are taxable for GST purposes will become taxable for HST purposes. Sales of new homes and sales and leases of commercial property will be subject to the HST in Ontario. However, point of sale rebates will be available for the provincial portion of the harmonized tax on certain specified consumer goods.

What is the general impact of HST on real estate transactions?
Sales of new residential housing will be subject to HST and will qualify for GST, HST, and transitional rebates.  Sales and rentals of commercial real property will be subject to HST.

On the other hand, sales of used residential housing and long-term rentals of residential housing will be exempt for HST purposes.

Will there be a HST rebate for new housing?
Yes. Purchasers of new homes in Ontario will be eligible for a rebate of 75% of the provincial component (i.e., 8%) of the HST paid to a maximum of $24,000. Sales of new homes above $400,000 will remain eligible for a maximum rebate of $24,000 (i.e., a rebate on the first $400,000 value).

What is exempt from HST?
HST will not be charged on many items that are currently not subject to PST including: Basic groceries, Prescription drugs, Some medical devices, Municipal public transit, Most health and education services, Legal aid, Most financial services, Child care, Tutoring, Music lessons, Long-term residential rents

Consumers will not have to pay the provincial portion of the proposed HST for: Children’s clothing and footwear, Children’s car seats and car booster seats, Diapers, Feminine hygiene products, Books, Prepared food and beverages sold for $4.00 or less, Print newspapers

How will HST affect my lifestyle and living expenses?
The government is providing sales tax rebates for individuals and families below a certain threshold up to $300 per individual or $1000 per family, and is lowering personal income tax rates.

What about the real estate Services?
The services (i.e. legal, taxes, etc.) associated with the purchase of a home on the re-sale market will be subject to the higher rate of tax.

As you may have noticed, the way people consume content is evolving. What once was the world of Radio, TV and Print, now is being consumed in some type of digital format. With the constant advances of mobile devices, you’re seeing content that ranges from a few minute videos to full-length movies being watched in someone’s hand.
Active mobile video users grew by 57% from the end of 2008 to end of 2009, from 11.2 million to 17.6 million. Much of this increase can be linked to the strong growth of Smartphones and PDA’s in the marketplace. So why not market your brand and services online, and on video sites such as YouTube.

YouTube is the largest video sharing site to date, with the most traffic and the highest amount of users. It is definitive the place for getting your videos published and marketed. Currently YouTube is second highest trafficked site globally, and estimates show 60 million unique viewers per month.

If you are already sold on this concept, what you must also know is that there is a right way and a wrong way to use video marketing. Here are a few tips for you:

• Be relevant and provide valuable content. While some of the videos you post should be commercial and related to your services, it is important to understand that you will need to also post videos that provide solutions, answers and help for the issues your clients are experiencing. Videos that are humorous, edgy, share a testimonial, inform and educate, often get better responses than videos that simply push your service.
• Get endorsed by viewers. When filming your video, don’t forget to ask the viewer to rate your video or leave a comment. The more comments and ratings your video accumulates, the higher it will be ranked by YouTube for the purpose of their search results.
• Optimize your video description. Before posting your videos online it is essential that you first plan your strategy for using them to get additional exposure. There are several key areas you need to pay attention to in order to make the most of your video marketing efforts. They are:

1. a.    The name of your video file. Be sure to include your keywords in the name of your video file. For example: “John_Doe_Thornhill_Home_Selling estimonial_01_29_2010.mp4″.
2. b.    The title of your video. When deciding on a title for your video, be sure to also include your keywords to help with search engine optimization. You can use the same title as the name of the file but this time you can include spaces.
3. c.    The description of your video. Your primary keyword should appear near the beginning of the first sentence in your description. It is wise to also try to include the primary keyword a couple of times in your description if it is possible.
4. d.    The tags for your video. Using your keywords in the tags for your video will also boost your chances of ranking well in search results.

• Promote your video on Social Bookmarking sites. Another way to gain additional visibility is by submitting your videos to social bookmarking sites. Sites like Digg and StumbleUpon will help you gain additional visibility and exposure for your work. If you have a Facebook page, don’t leave it out either. Users see your content on these sites and if they like it they can vote it up the charts which bring you even greater visibility and traffic to your sites.

It costs almost nothing to use video marketing to promote your brand, your services, or your listings,  and if you apply these simple strategies and consistently upload a few videos per week you’ll quickly begin to generate new leads around the clock, even when you are sleeping. Isn’t that grand?  Enjoy.

Published in REM. May 2010.

If it seems you’re only a few clicks away from becoming the next “thing”, hold on. Just creating something new or creating a sparkling personal brand isn’t enough to get you going. You see, it’s not how good you are, but how good you can sell yourself.  You can be the next Picasso or the reincarnation of Socrates, if you don’t speak up, nobody will ever hear what you have to say.

If you don’t speak up, how will people know that “YOU” exist?  A lot of people think just because it’s a “personal” brand that they don’t need anybody to create it.  But these other people we interact with are what makes us a personal brand.  It’s a framework we use to promote ourselves.  Working on a personal brand means you have to communicate with people you interact with, tell them what you’re doing, how you’re doing it and preferably that you’re really good at it.  If you don’t communicate how can you expect people to notice the talent you have!

I receive 100+ emails and dozens of calls every day. I respond to every single email and message personally. You may think that is silly, but I feel it is the right thing to do. I put away an hour of my day to return my calls. Some people announce in their voice mail to specifically let callers know their calls will be returned during specific hours of the day.  Isn’t that wonderful?

Returning phone calls used to be a courtesy that was heavily ingrained in proper business etiquette. Sometime during the exponential growth of information to which we have all been exposed, returning phone calls has become the exception rather than the rule.

People that don’t call or email me back, get on my nerves. It’s disrespectful.  It says, “you are not important to me.”  My philosophy is that you should never be so self-absorbed that you stop caring about others.  If someone calls you, call them back.  Dude, if they are “asking” and you have nothing to offer, simply say “no”. That will work. Trust me!

The one thing to keep in mind is that there may be a legitimate reason for someone to not return my call.  Health or family issues come to mind.  When someone has a personal crisis, everything else is off the radar.  So before you go off the deep end, make sure there was not a legitimate reason for the lack of a return call.

Returning phone calls is an essential part of building strong relationships, which is the foundation for a successful business. Want to talk to me about it? Call me :-). You may have to leave a message, but you can be sure that I will call you back. So let it be written, so let it be done.